Sunday, December 20, 2009

Where is the GOOG outrage on option repricing?

What if Goldman Sachs would of re-priced employee options at the market low? Oh that's right--back in February, when Goldman's partners had margin calls on their stock, Goldman lent them money!

GOOG just re-prices employee options at the low, and they do it with pre-dating!

And take some off the top!

This Offer to Exchange Certain Outstanding Stock Options for New Stock Options (the “Exchange Offer”) and your withdrawal rights will expire at 6:00 a.m. Pacific Time
on March 9, 2009, unless extended (the “Expiration Date”).
Google Inc., a Delaware corporation (“Google,” “we,” “us,” or “our”) is offering our employees (including eligible officers) the opportunity to exchange outstanding options to purchase shares of Google Class A common stock granted under our 2004 Stock Plan (the “2004 Plan”) prior to February 3, 2009, that have an exercise price per share greater than the last reported sale price per share of Google Class A common stock on The Nasdaq Global Select Market on March 6, 2009 (“Eligible Options”)...
We have issued stock options under the 2004 Plan as a means of promoting the long-term success of our business because we believe that sharing ownership with our employees aligns their interest with Google’s interests and the interests of our stockholders and encourages our employees to devote the best of their abilities and industry to Google. However, our Board of Directors has observed that many of our employees (including eligible officers) have outstanding stock options with exercise prices that are higher than the current market price per share of our Class A common stock. These stock options are commonly referred to as being “underwater.” As a result, these stock options have little value as either an incentive or retention tool.
This Exchange Offer is intended to address this situation by providing our employees with an opportunity to exchange Eligible Options for New Options granted under the 2004 Plan. By making this Exchange Offer, we intend to provide our employees with the opportunity to hold stock options that over time may have a greater potential to increase in value, thereby creating better incentives for employees to remain at Google and contribute to achieving our business objectives.

So GOOG employee options get repriced on March 6, 2009 when GOOG was at $308.57. The filing fee, indicated that the underwater options have a value of over $1.1 billion.

GOOG is now at $596, so over $2 billion was taken from shareholders and given to GOOG employees.

Do no evil, unless the stock price goes down.  And though we talk long term, if the stock goes down in the short term, we re-price!

We need to support the real estate market in Atherton!

Then we re-price the options!

GOOG's worships at the altar of Charles Darwin, but the company won't subscribe to the survival of the fitness when its stock goes down!


Sam said...

Damn, I almost got through the interview process at GOOG in Feb, right near the lows.

Would have been a lot richer if that had worked out even on a handful of options at ~320.

Anonymous said...

Eric also shows up on Mad Money to pimp his stock when the troops are underwater.